The Guardian | 21 February 2019
We cannot allow Liam Fox’s post-Brexit trade plans to go unscrutinised
The government cancelled parliament’s recess at short notice so as not to give the impression MPs were on holiday a matter of weeks before we face crashing out of the EU.
The international trade secretary, Liam Fox, is using the opportunity to avoid proper scrutiny of plans that threaten our rights, our environment and our democracy. He tabled a general debate on post-Brexit trade agreements with the US, Australia, New Zealand and the Trans-Pacific Partnership for Thursday. And he is expected to launch negotiations soon after the debate – with no chance for parliament to stop him.
Last month, it emerged that US meat and pharmaceutical firms are demanding that the UK lowers its food and health standards as part of a post-Brexit trade agreement with the US. As many of us feared, “Global Britain” is at risk of becoming little more than an excuse to slash standards and deregulate in the interests of multinational corporations.
But something that has slipped by virtually unnoticed is the government’s plan to include investor-state dispute settlement (ISDS) mechanisms in future trade deals. ISDS clauses let foreign investors sue national governments for introducing policies that harm their profits. They have led to global corporations taking governments to secretive private arbitration courts in cases that can cost taxpayers billions.
In 2009, US firm Cargill successfully sued Mexico over its introduction of a tax on high fructose corn syrup, which was designed to improve people’s health. Cargill was awarded $77.3m.
In 2012, Dutch company Achmea sued Slovakia for introducing health insurance reforms designed to improve public health access. Achmea initially won €22.1m in damages – but the ruling was ultimately overturned by the European Court of Justice.
In 2017, Canadian firm Bear Creek won $18m in compensation because Peru cancelled a mining licence after the company failed to obtain informed consent from indigenous landowners, ignoring the International Labour Organization convention on indigenous peoples.
ISDS mechanisms threaten our environment, public health, workers’ rights, and the very sovereignty over our laws and regulations that the likes of Fox so fetishised in 2016 with the leave campaign’s “Take back control” slogan.
Members of the European parliament hold panels reading “Stop ISDS” as they take part in a voting session during a plenary session in 13 February 2019 in Strasbourg
Thanks in large part to our membership of the EU, the UK has relatively strong environmental protections. But issues like climate change and pollution cross borders – and many countries in the global south are only beginning to build robust regulatory frameworks around things like carbon emissions, air pollution and plastic waste. ISDS agreements mean introducing any progressive environmental legislation comes with the threat of costly legal action – leading to “regulatory chill”, where countries avoid protecting their people and the natural world for fear of being sued by investors.
ISDS mechanisms ride roughshod over democracy. Sugar taxes in Mexico, healthcare reforms in Slovakia and mining licensing laws in Peru were policies put forward by elected representatives trying to stand up for the public. No self-respecting democratic nation should be held to ransom by the whims of multinational investors.
Governments must be free to protect the public interest and the future of our planet, no matter the consequences for the profits of those at the helm of a handful of multinational businesses.
When ministers made clear their continued support for ISDS mechanisms in last month’s Lords debate on the trade bill, US corporations will have been rubbing their hands with glee.
If we do leave the EU next month, the trade deals Fox lines up could hold all future governments to ransom. If the next election delivers a progressive prime minister with ambitions to empower our communities and redesign our economy, their hands would be tied by any ISDS agreements.
Everything from bringing our railways back into public hands to banning fracking could become prohibitively expensive, as multinational executives demand compensation. So much for taking back control.
If we’re to stand a chance of avoiding climate catastrophe, healing our divided communities and building a fairer society, MPs cannot allow Fox’s plans to go unscrutinised – and progressives of all stripes must work together to defeat them.
• Caroline Lucas is MP for Brighton Pavilion